LB Finance maintains growth momentum with Rs. 7 b pre-tax profit in first quarter

LB Finance PLC commenced the 2026/27 financial year on a strong note, recording a 31% increase in Profit After Tax (PAT) to Rs. 3.54 billion for the quarter ended 30 June 2026, compared to Rs. 2.7 billion in the corresponding period last year. 

Total income increased by 47% to Rs. 18.76 billion, while net interest income grew by 31% to Rs. 8.94 billion, reflecting continued business expansion and healthy growth in the lending portfolio. Earnings per share improved to Rs. 6.38, compared with Rs. 4.88 in the corresponding quarter of the previous year. 

Operating Profit Before Tax (PBT) on financial services increased by 30% to Rs. 7.17 billion, while profit before taxation rose by 30% to Rs. 5.7 billion. The Return on Equity (ROE) improved to 22.96% from 21.01% in the corresponding period in the previous year.

The company’s loan portfolio expanded to Rs. 341.96 billion, an increase of over Rs. 29 billion during the quarter, while total assets grew to Rs. 433.95 billion. Customer deposits increased to Rs. 181.12 billion, reinforcing LB Finance’s strong market position and customer confidence.

Despite continued uncertainty driven by geopolitical tensions, inflationary pressures, liquidity constraints, and heightened volatility in global markets, LB Finance delivered strong performance through prudent risk management, disciplined lending practices, and a strong focus on asset quality.

The company continued to maintain strong asset quality, with the Gross Non-Performing Loan (NPL) ratio improving to 1.41%, compared with 1.91% a year earlier, showcasing the effectiveness of its credit evaluation and recovery processes. The Core Capital Ratio stood at 18.89% and the Total Capital Ratio at 18.59%, remaining well above regulatory minimum requirements. Liquidity levels also remained comfortably above the required regulatory thresholds.

LB Finance diversified its funding sources during the quarter by securing funding from two leading international development finance institutions (DFIs): Norfund, the Norwegian investment fund for developing countries, and Swedfund, the Swedish State-owned development finance institution. These facilities will strengthen the company’s Environmental, Social, and Governance (ESG) compliance and reporting framework while supporting increased financing for the micro, small and medium enterprises (MSME) sector.

Reinforcing its strong financial performance, LB Finance was recently ranked the best-performing finance company in Category 1 by K Seeds Investments in its Finance Sector Ranking for the fourth quarter of FY2025/26. The independent assessment evaluated 29 listed finance companies across 10 key financial performance indicators, recognizing LB Finance’s strong profitability, operational efficiency, asset quality, and growth.

At Group level, LB Finance recorded a 41% increase in PAT to Rs. 3.83 billion, with total operating income rising by 43% to Rs. 12.09 billion. Group assets increased to Rs. 452.98 billion by Rs. 37 billion from the previous financial year end, supported by the Group’s diversified financial operations, comprising Associated Motor Finance Company PLC and LB Microfinance Myanmar Company Ltd.

The company’s digital finance and lifestyle platform, CIM, continued its strong growth momentum during the quarter, driven by accelerated customer acquisition and the introduction of new features, including the UnionPay Virtual Debit Card, Tap to Pay, Cross-Border Payments, and e-Gifting. Increased customer engagement, particularly among Gen Z, together with growth in transaction volumes, transaction counts, and digital investments, further strengthened its position in Sri Lanka’s digital financial services landscape.

Looking ahead, LB Finance will continue to strengthen its position as a trusted financial partner by adapting to evolving customer needs, leveraging emerging opportunities, and enhancing operational excellence. Guided by sound governance and prudent stewardship, the company remains firmly committed to creating enduring long-term value for its stakeholders.